Tag: news

While even some of the most dogged bulls are throwing in the towel on their optimistic forecasts for the US (see Goldman taking the axe to its 2019 GDP forecast noted earlier), there are those who steadfastly believe that 2019 will be a solid year for the US economy, and that no recession is still in sight.

One among them is Allianz chief economic advisor Mohamed El-Erian, who dismissed concerns that the US is facing a recession in the coming year, saying in an interview on Fox News Sunday that the economy is likely to continue growing at 2.5-3%.

“[A recession] is certainly not becoming a reality. You need either a major policy mistake or a massive market accident to push us into recession. But we will slowdown unless we build on the pro-growth policies.”

On the same day that he penned a Bloomberg op-ed, explaining why “life is getting harder for central banks” in which he concluded that “whichever way you look at it central banks will be exposed to more criticism from politicians, market participants and analysts” – and rightfully so, after all it was the central banks that engaged in the biggest can-kicking experiment in history by injecting $16 trillion in liquidity and the time to pay the piper is fast approaching, El-Erian said that “Trump’s frequent criticism of Fed policy is unusual” (in fact, as Goldman observed earlier it is not at all unusual and that “it is far from unprecedented on a longer-term comparison”), adding that the independence of the central bank is important to economic security (at this point we could go into a tangent how only career economists believe the Fed is “independent”, especially from commercial bank pressure but we won’t).

And yet, adding his own set of criticism to US monetary policy, El-Erian said that the Fed realizes that it can’t put its key policy tool, the federal funds rate, on autopilot, and that “it needs to better communicate its policy choices.”

El-Erian also said that the turmoil in Washington, including a government shutdown now in its ninth day, is a factor in the market’s recent decline, which is also open for debate considering that the market is up nearly 3% since the government was officially shutdown at midnight on December 21.

And while the Allianz economist remaind optimistic on the US economy, he correctly noted that a bigger factor is that the global economy – notably China and Europe – has become more uncertain.

Finally, one statement by El-Erian that was largely undisputed was his contention that with the Fed and ECB tightening liquidity (the ECB’s QE ends in two days) “it’s no longer about buying every dip, it’s about selling every rally.” And as market uncertainly is amplified by computer trading (but not only as we discussed extensively yesterday) the possibility of 1,000-point daily swings in the Dow Jones Industrial Average is the “new reality” for now, he concluded.

via RSS http://bit.ly/2CFCIKd Tyler Durden

In what will likely come as a relief to anxious EU officials who have been hoping to avoid another calamitous confrontation with a restive member state, Italy’s ruling populist coalition managed to ram through approval of its revised budget plan – including its laughably precise projected budget deficit of 2.04% (because only economists can come up with such an “accurate” number without laughing at themselves) – ahead of a deadline that would have forced the country to revert to its 2018 spending regimen. The move marks the end of a scuffle between the EU and Italy that could have led to billions of euros in fines levied against debt-burdened Italy and another selloff in Italian bonds.

The final budget plan included some cutbacks to campaign promises made by the League and the Five Star Movement – the two partners in the populist coalition – including scrapping plans to lower the retirement aid and limiting a planned welfare expansion, according to Bloomberg.

Deputy PM Luigi Di Maio, Prime Minister Giuseppe Conte, Deputy PM Matteo Salvini

By passing the budget, investors in Italian bonds and stocks will likely drop their fears of an all-out collapse in the country’s banking system, a feared result of the country’s clash with the EU, which could come as a relief to Italian assets in the new year after the country’s sovereign bonds posted their first yearly decline since 2011.

The political opposition in Rome objected to the populists’ decision to curtail debate on the budget plan, as MPs aligned with former prime minister Silvio Berlusconi’s Forza Italia party were escorted from Parliament while members of the center-left Democratic Party are seeking a challenge in a constitutional court.

Budget debate was curtailed in both houses of parliament, sparking opposition outrage. Lawmakers from ex-premier Silvio Berlusconi’s center-right Forza Italia party donned blue vests with slogans like “Enough Taxes,” before being escorted from the lower house on Saturday afternoon.

The center-left Democratic Party has appealed to the country’s constitutional court in protest after government moves to ram the budget bill through parliament. The coalition has said time was limited because of lengthy negotiations with the European Commission, which helped avert fines being imposed on Italy.

Passing the budget caps weeks of nervous negotiations with the EU, which is also grappling with the departure of the UK next year. Financial analysts have been looking to Italy for clues about the cohesiveness of the EU itself. Ironically, Italy’s decision to lower its deficit target from 2.4% to 2.04% (there’s that number again) was more than negated by the Italian government’s decision to lower its GDP growth projections to 1% from 1.5%.

But financial analysts can now sleep soundly, assured that the whipsaw volatility triggered by the budget showdown with the EU will likely subside – at least at until the 2.04% number is exposed for the goalseeked political farce it is.

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Since wrapping up negotiations with the EU over the UK Brexit withdrawal treaty and its troublesome Irish Backstop, UK Prime Minister Theresa May has insisted that her fractious parliament has three options: Her deal, no deal or no Brexit at all. And though recent reports have suggested that May might be on the verge of finally winning a majority for her supremely unpopular deal, she and her senior ministers are cranking up the pressure on intransigent Tories to give her deal the best possible chance of passing during a scheduled “meaningful vote” on Jan. 14. Including reminding MPs that if they don’t vote for her deal, they will risk canceling Brexit altogether.

And in the latest continuation of May’s “Project Fear”, International Trade Secretary Liam Fox warned during an interview with the Sunday Times this weekend that he sees a “50-50” chance of Brexit failing altogether if MPs reject May’s deal, and that it is “a matter of honour” for MPs to back May’s deal because failure would be “incendiary”.

Liam Fox

Fox’s comments follow reports that the Tory Whip Julian Smith has ratcheted up pressure on conservative MPs over the holiday.

As a reminder, here are some of the other “Project Fear” predictions made by May’s government:

Here are some of the Project Fear predictions the government has made:

•     No clean drinking water.
•     Food shortages.
•     No insulin for diabetics.
•     Shortages of medicine.
•     No more sandwiches (yes, really).
•     Risk of “super-gonorrhea” epidemic.
•     Immediate recession.
•     Every family thousands of pounds poorer.
•     No planes allowed through other nations’ aerospace.
•     The south of England becomes a carpark for trucks that were previously engaged in barrier-free trade between nations.

* * *

And though Fox would like to see more concessions from the EU, the fact remains that the public has spoken and MPs have an obligation to vote for the deal, given the “very small risk” that the backstop – the deal’s most controversial element – will take effect.

Parliament contracted out its sovereignty to the public by holding a referendum, Fox says. “So parliament cannot now, with any honour, renege on that result. Were they to do so, I think you would shatter the bond of trust between the electorate and parliament. And I think that would put us into unprecedented territory with unknowable consequences.”

The cabinet minister insists he would rather accept a deal that falls short than risk “no Brexit.” Although he would “like to see more” EU concessions on the Irish backstop – the insurance policy to keep an open border on the island of Ireland ” he adds: “If the choice is what I would regard as a very small risk of the backstop coming into existence or a much bigger risk of no Brexit, I’m very clear which way I would come down.”

The Times noted that May’s chief negotiator, Olly Robbins, has continued to hold talks with his EU counterparts over the past two weeks. Yet, European Commission President Jean Claude Juncker has repeatedly insisted that there will not be any more concessions, and that Parliament needs to “get your act together” and pass the deal.

Jean-Claude Juncker, head of the European Commission, today urged Britain to “get your act together”, and denied there was any EU agenda to stop Brexit.

Writing in the German newspaper Welt am Sonntag, he said: “I find it unreasonable that part of the British public seems to think that it’s entirely up to the EU to present a solution for all future British problems.”

“My call is: get your act together. And tell us what you want. Our proposals have been on the table for months.”

“One insinuates that our aim is to keep Britain in the EU with all means possible. But that’s not our intention,” said Juncker.

“We only want clarity about the future relationships. And we respect the result of the referendum.”

If May’s deal doesn’t pass on Jan. 14, reports suggest her plan is to run out the clock and leave MPs no option but to either pass her deal or delay Brexit or call for a second referendum. Various “Plan Bs” that have been kicked around in recent months, including an agreement that lays the groundwork for a “Norway” or “Canada” style trade deal, but these ideas are short on details and it remains unclear whether the EU would agree to renegotiate if May’s deal fails.

If the deal fails in its first vote, May will simply call for a second…and if that doesn’t work, we imagine she’ll keep bringing it back and bringing it back until she browbeats her MPs into agreeing. 

via RSS http://bit.ly/2BOzEtD Tyler Durden

With roughly a week left before the first round of in-person trade-deal talks, the White House has leaked a rough outline of its expectations for a deal reportedly gleaned from preliminary conversations between President Trump and President Xi (Trump tweeted on Saturday that he and Xi had made “big progress” toward a deal during their early calls).

If nothing else, the report in the Wall Street Journal offers a benchmark against which the final deal can be judged. According to WSJ, the talks are focusing on boosting US exports and loosening regulations that discriminate against US firms operating in China (something the Chinese have been hinting at in recent policy decisions to lift import bans and remove retaliatory tariffs, while also reportedly weighing a decision to scrap their “Made in China 2025” policy).

However, as with anything leaked from the West Wing, WSJ cautions its readers to take the report with a grain of salt, especially since given the market volatility Trump is liable to be exaggerating the chances of a deal, especially since trade optimism is expected to boost markets, Trump’s favorite “barometer” of his administration.

But people familiar with the state of negotiations said the president may be overstating how close the two sides are to an agreement. They note Mr. Trump has looked to calm markets, which have gyrated in recent days, in part, because of concern that the trade fight between the US and China could spin out of control.

One other notable detail from the WSJ report is that the US likely won’t seek a commitment from China to end its cyberespionage practices. Instead of bundling this in with the trade talks, Treasury is pushing for China’s espionage program (which recently won it the condemnation of the US and a group of its allies, as well as a host of indictments of hackers and agents allegedly affiliated with the Ministry of State Security), to be put off for a separate round of negotiations (showing that the US is being practical about setting realistic expectations for a deal, since China has repeatedly promised to rein in these practices, only to allow them to continue).

After the first round of in-person talks beginning Jan. 7, a more-senior delegation led by Treasury Secretary Mnuchin, Trade Rep. Lighthizer (on the US side) and Vice Premier Liu He (on China’s side) will meet in Washington the following week. Right now, Lighthizer’s office is leading the talks, with close cooperation from Treasury:

A team of U.S. trade officials, including Deputy Trade Representative Jeffrey Gerrish and Treasury Undersecretary David Malpass is expected in Beijing the week of Jan. 7 for several days of talks. If those negotiations make progress, Chinese trade officials, led by Vice Premier Liu He, will follow up with talks in Washington the following week, or soon after that with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.

The trade representative’s office is now leading trade talks, though Treasury is also playing a significant role. For instance, Mr. Mnuchin lobbied successfully before Christmas to keep Chinese firms from being hit with sanctions for cyber espionage on the same day that the Justice Department announced indictments of two Chinese citizens allegedly tied to a state-sponsored campaign to steal sensitive information from U.S. businesses.

Treasury has wanted to keep the espionage issue separate from trade talks. But others in the government continue to press for Treasury sanctions, both to punish Beijing and to make clear that the U.S. will enforce agreements.

When it comes to Chinese promises to end or limit IP transfers and offer greater access to its markets, the US is planning to demand that verifiable steps be taken on China’s part before the US rolls back its tariffs.

The latter proposals include cracking down on Chinese officials who pressure U.S. firms to transfer technology to Chinese partners—the heart of the Trump administration complaints against China. Beijing is also expected to propose giving foreign firms greater access to financial services and other sought-after sectors.

But China has made pledges of this sort in the past. U.S. negotiators now are pressing their Chinese counterparts to spell out, in great detail, the kinds of changes they would make—and to assure that Beijing doesn’t use other means to restrict foreign firms. Over the past year, China has resisted giving such detailed information.

[…]

The U.S. is also focusing on how such a deal would be enforced. One way is to keep current tariffs on China and only remove them after Beijing has carried out its pledges.

If China promises to grant US firms greater access to its domestic market, the US will want to verify that Beijing isn’t using some other method to effectively drive them out.

For instance, if Chinese regulations are revised to boost foreign participation in financial markets, the US wants to be assured that Beijing won’t use government authority over licensing, environment, land use and other areas to hinder US firms anyway. Washington also wants to make sure US firms benefit quickly and that approvals don’t stretch out for years.

For those who have been following the trade dispute so far, it might seem like the US is setting a high bar for an agreement, and analysts at Goldman Sachs would agree. They don’t expect a deal to be forthcoming by the March 2 deadline, and that tariffs will likely rise further in 2019. However, they believe the Trump administration will ultimately cave and strike a deal by 2020, just as it did with Canada and Mexico before the midterms (then again considering Goldman’s recent predictive track record, this likely means that trade war will extend into 2020 if not beyond).

* * *

Will the US impose further tariffs?

Yes. We believe tariffs on imports from China are likely to rise somewhat further in 2019, though we also expect that an agreement could be reached by late 2019. On March 2, tariffs are scheduled to increase to 25% on $200bn of imports from China unless the White House intervenes to prevent this. Chinese policymakers appear intent on easing tensions—China has announced purchases of US soybeans, rescinded retaliatory tariffs on US autos, and backed away from the “Made in China 2025” plan— but it is unclear whether this will be enough to satisfy the White House. US Trade Representative Robert Lighthizer, who is leading talks from the US side, has stated that March 2 is a “hard deadline” for reaching an agreement and that postponing the increase will require a “verifiable” deal that brings about “structural change” and “protection of US technology”, which appears to set a high bar for a deal. We also note that while Presidents Trump and Xi were able to reach an agreement at their face-to-face  meeting on December 1, further postponement of the 25% tariff might be harder to achieve without another face-to-face meeting, which has not been scheduled.

While we believe an increase in the tariff rate is more likely than not, we nevertheless believe that tariffs on imports from China are likely to peak in 2019, for two reasons. First, we expect that the White House will want to announce a more comprehensive agreement with China ahead of the 2020 presidential election, similar to the agreement President Trump struck with Canada and Mexico on revising NAFTA ahead of the 2018 midterm election. Second, the measures the US government is taking with regard to China go beyond tariffs. In recent weeks, the Trump Administration has proposed restricting exports of certain technologies and foreign investment in companies that focus on such technologies, as well high-profile legal actions focused on technology-related issues having to do with China.  

If no deal is reached by the March “hard deadline”, the US will raise tariffs on some $200 billion of Chinese imports from 10% to 25%, and begin the process of slapping tariffs on another $200 billion-plus worth of Chinese goods flowing into the US.

via RSS http://bit.ly/2QeR9c5 Tyler Durden

It was just three weeks ago that Goldman, having long held a painstakingly upbeat outlook on the US economy for 2019, finally capitulated and trimmed its hawkish forecast for 4 rate hikes in 2019, calling for less than a 50% probability of a rate hike in the March, even as the bank continued to sneers at the market’s current pricing for the funds rate, which now anticipates no full hike in all of 2019.

Not anymore.

In the last economic note for 2018, Goldman chief economist Jan Hatzius says that in light “of the recent FCI tightening [i.e. market turbulence] and weaker US data” the bank has not only slashed its near-term GDP outlook, but taken down its full year rate hike forecast to a paltry 1.2 for all of 2019 (keep in mind, this number was 4 as recently as the start of December), to wit:

We have revised down our US growth forecast for the first half of 2019 from 2.4% to 2%; we continue to expect growth of 1¾% in H2.

To justify its abrupt reversal, Hatzius presents three “strong” reasons why we should expect slower growth in 2019 vs recent years.

• “First, a slowdown is already evident in the numbers. As shown in Exhibit 1, both real GDP and our current activity indicator (CAI) were running at 3½-4% over the summer, but the pace has recently fallen to the 2-2½% range.”

• “Second, the impulses from fiscal policy and financial conditions are turning more negative. In the second half of 2018, fiscal policy contributed nearly ¾pp to growth via lower taxes and higher spending, but this number will gradually diminish to roughly zero by the end of 2019. In addition, financial conditions have turned into a significant headwind and could take more than 1pp off real GDP growth in the first three quarters of 2019. This means that the demand-side case for above-trend growth is weakening significantly.”

• “Third, the economy needs to slow in order to limit the risk of a dangerous overheating down the road. Unemployment is already ¾pp below our 4½% estimate of the rate consistent with a 2% inflation rate in the medium term. And Exhibit 3 shows that a variety of other measures of labor market slack confirm the message of labor market tightness. Given the close correlation between labor market overheating and subsequent recession, Fed officials will want to see a significant slowdown in growth. This means that if financial conditions reverse too much of their recent tightening, Fed officials would likely turn more hawkish to keep growth from rebounding too much.”

Then, in an amusing twist, the bank which was formerly among the most bullish on the US economy notes that “investors have become much more concerned about a possible recession in recent months, as financial conditions have tightened and growth has slowed.” And while Goldman says that it is “still not particularly worried about a recession” admits that a growth slowdown is necessary to “land the plane” – i.e., avoid a hard landing – further adding that “the two key historical risk factors—inflationary overheating and asset market bubbles—remain largely absent”, and while one can argue the first – especially when stripping out the BLS’ infamous hedonic adjustments which make soaring costs of living, tuition and healthcare expenses magically appear flat as a pancake, the fact that the S&P is is up 300% from its all time lows on the back of $16 trillion in artificial central bank liquidity, is hardly convincing that the “asset market bubble is absent.”

In any case, to underscore its point of a low recession risk, Goldman notes that even with the recent deterioration in economic growth and financial conditions, the bank’s model “says that the risk remains relatively limited in the short term” as shown in the chart below, and adds that “looking beyond the model, we think the prospects for a soft landing are better than now widely thought. “

Of course, that’s precisely what other forecasters, specifically Bank of America thought as well… until the bank laid out a chart showing that according to at least one of its models, the odds of a recession in 2019 have soared from less than 30% heading into December, to a whopping 57% as of last week.

One wonders how long it will take Goldman to capitulate – again – and revise its current 12 month recession odds from 10% to well over 50%, as it once again scrambles to catch up with other banks?

And speaking of further slowdowns to the economy, as noted above, the bank has taken a machete to its rate hike forecast, and after expecting 4 hikes in 2019 less than a month ago, has “also made a further downgrade to our funds rate call” with Goldman now seeing only a “probability-weighted 1.2 hikes in all of 2019, from 1.6 hikes previously.”

Here are some more details on why Goldman claims that contrary to what is now conventional wisdom that the Fed’s rate hike cycle is over, the bank disagrees.

On the back of the lower H1 growth profile, we have made some further downward revisions to estimates for the probability of rate hikes in 2019. Not only is a rate hike in Q1 quite unlikely, but our estimates for the probability of hikes in subsequent quarters have also come down to 55% for Q2 (from 65%) and 45% in Q3 (from 55%); we still view the probability of a hike in Q4 as 55%, i.e. slightly more likely than not. We have also slightly raised our probability of rate cuts to 10% in Q3 (from 5%). As shown in Exhibit 9, these probabilities generate an expected value of 1.2 net hikes in 2019, compared with market pricing of zero hikes.

Here, the only thing Goldman is right about is that the market no longer expects any more rate hikes in 2019, while the odds of a rate cut in the Jan 2020 meeting (above 30%) are 5x greater than the odds of a rate hike.

in fact, as the next chart shows, there has been a stunning repricing in the market’s view of central bank regimes with the ECB now seen by the market as fractionally more likely to hike than the Fed in 2019, a remarkable turnaround, especially since the European economy is expected to suffer a similar economic slowdown in the coming year.

Of course, since it would be uncouth for Goldman to side with the market and go from forecasting 4 rate hikes to 0 in three weeks, the bank claims that the Fed will hike further, for four reasons:

• First, the economy is still growing above trend, from a starting point at which the unemployment rate is already 0.7pp below the FOMC’s latest estimate of full employment. To be sure, growth is slowing, “but there are also some good reasons to expect that slowdown to remain relatively moderate.”
• Second, the bank expect inflation to rise above 2% in the latter half of 2019. Wage growth is accelerating, and Goldman still sees a slightly greater than even probability of a further rise in US tariffs next year.  Higher inflation would lower the perceived real funds rate and probably help persuade Fed officials to resume hiking.
• Third, the level of the funds rate is still relatively low. As Chairman Powell noted in the December 19 FOMC press conference, the current 2¼-2½% target range only touches the bottom end of the 2½-3½% range of neutral rate estimates submitted by FOMC participants, and it is well below the levels implied by virtually any form of the well-known Taylor rule.
• Fourth, Goldman expects the FOMC to resist the demands from President Trump for easier monetary policy, and to remain firmly focused on the data and the economic outlook. As Hatzius adds, “although the pressure from the White House contrasts with the hands-off approach taken by the last three presidents, it is far from unprecedented on a longer-term comparison. And in many (though not all) cases, Fed officials ultimately decided to withstand the pressure and focus on their longer-term mandate rather than near-term expediency.”

Considering Goldman’s track record (we have’t forgotten the bank’s calls to keep buying oil in October and November all the way lower, and lower, and lower as WTI crude plunged 28% in Q4, its worst drop since the historic fourth quarter of 2014, which Goldman’s commodity “experts” blamed on “negative convexity“,  we look forward Hatzius note – due in about four weeks – laying out four reasons why his four reasons why the Fed will hike in 2019 were all wrong.

via RSS http://bit.ly/2QVwBKF Tyler Durden

Over a year ago we reported on the fact that the Saudi-US-UAE coalition in Yemen has been increasingly reliant on foreign mercenaries, including even officers, from Sudan to execute its three-year long ground war against Shia Houthi rebels as coalition jets pounded urban areas from the skies. As this was long before the brutal Jamal Khashoggi killing at the hands of the Saudis, we were among a tiny handful that bothered to cover it — aside from a few Middle East outlets — significantly before western mainstream media suddenly “discovered” the tragedy unfolding in Yemen, a Saudi-driven conflict the UN has belatedly called “the world’s worst humanitarian crisis”.

But Khashoggi’s death and crown prince MbS’ new pariah status means The New York Times, The Washington Post, CNN, and others have finally decided to spotlight Yemen and dig into inconvenient truths of the war at a moment the United States has pledged to greatly lessen its role and as the US Senate is scrutinizing American involvement, including the Pentagon’s recently halting its aerial refueling program to Saudi-UAE jets. What does the latest NYT coverage find? The Saudi coalition — made up of America’s closest Middle East allies — is sending child mercenaries from Darfur to the front lines of the Yemen war. 

According to the Times report:

Led by Crown Prince Mohammed bin Salman, the Saudis say they are battling to rescue Yemen from a hostile faction backed by Iran. But to do it, the Saudis have used their vast oil wealth to outsource the war, mainly by hiring what Sudanese soldiers say are tens of thousands of desperate survivors of the conflict in Darfur to fight, many of them children.

At any given time throughout the past almost four years of war (the Saudis entered Yemen in early 2015), some 14,000 Sudanese mercenaries have been fighting alongside pro-Saudi forces, often on the front lines in places their UAE officers won’t dare to go. 

For families in war-torn Sudan, the Saudis’ deep pockets and lucrative payment offers to send their young to fight in Yemen has proven irresistible given no other means of survival, according to the story of one such family:

Then, around the end of 2016, Saudi Arabia offered a lifeline: The kingdom would pay as much as $10,000 if Hager joined its forces fighting 1,200 miles away in Yemen.

Hager, 14 at the time, could not find Yemen on a map, and his mother was appalled. He had survived one horrific civil war — how could his parents toss him into another? But the family overruled her.

“Families know that the only way their lives will change is if their sons join the war and bring them back money,” Hager said in an interview last week in the capital, Khartoum, a few days after his 16th birthday.

Noticeably, unlike all prior scant reporting on Yemen, the New York Times actually features Crown Prince Mohammed bin Salman’s name front and center as responsible for such evils and injustice.

The Saudi Arabia government has been outsourcing the ground war in Yemen to Sudanese men and boys from Darfur–turning many into child soldiers–paying impoverished people and directing them by radio so no Saudi soldiers need to be on the ground in Yemen. https://t.co/XcKQaTcJDx pic.twitter.com/2AfRMHuEaC

— Kenneth Roth (@KenRoth) December 29, 2018

Most Americans might be forgiven for having no clue what the war in Yemen actually looks like, especially as Western media has spent at least the first three years of the conflict completely ignoring the mass atrocities taking place while white-washing the Saudi coalition’s crimes. Unlike wars in Iraq, Libya, and Syria, which received near daily coverage as they were at their most intense, and in which many Americans could at least visualize the battlefield and the actors involved through endless photographs and video from on the ground, Yemen’s war has largely been a faceless and nameless conflict as far as major media is concerned.

Aside from mainstream media endlessly demonstrating its collective ignorance of Middle East dynamics, it is also no secret that the oil and gas monarchies allied to the West are rarely subject to media scrutiny or criticism, something infamously demonstrated on an obscene and frighteningly absurd level with Thomas Friedman’s prior fawning and hagiographic interview with Saudi MbS published in the Times.

The NYT continues in its description of the Saudi coalition’s frontline paid foreign fighters:

Most belong to the paramilitary Rapid Support Forces, a tribal militia previously known as the Janjaweed. They were blamed for the systematic rape of women and girls, indiscriminate killing and other war crimes during Darfur’s conflict, and veterans involved in those horrors are now leading their deployment to Yemen — albeit in a more formal and structured campaign.

In interviews, the Times has learned that rates of child soldiers among the militias make up no small percentage. 

And the Saudi and Emirati commanders are said to direct the military action “almost exclusively by remote control” from a safe distance:

Some families are so eager for the money that they bribe militia officers to let their sons go fight. Many are ages 14 to 17. In interviews, five fighters who have returned from Yemen and another about to depart said that children made up at least 20 percent of their units. Two said children were more than 40 percent.

To keep a safe distance from the battle lines, their Saudi or Emirati overseers commanded the Sudanese fighters almost exclusively by remote control, directing them to attack or retreat through radio headsets and GPS systems provided to the Sudanese officers in charge of each unit, the fighters all said.

Again, this is a campaign that the United States has been an integral part of from day one. 

It must be remembered that years of Saudi airstrikes on already impoverished Yemen that have already killed and maimed tens of thousands of civilians,many thousands among those are children according to the UN, and displaced hundreds of thousands, have been enabled by both US intelligence and military hardware, including the US/UK blessing to impose military blockade on key ports which form humanitarian life-lines for the starving, disease-ridden and war weary population. 

* * *

Below is the type of mainstream media coverage that Americans were subject to throughout the early years of the war.

At the time of the below 2016 CNN interview, Saudi Arabia with the help of its regional and Western allies — notably the U.S. and Britain — had been bombing Yemen for a year-and-a-half, and as the United Nations noted, the Saudi coalition had been responsible for the majority of the war’s (at that point) 10,000 mostly civilian deaths. Some humanitarian organization estimates now put the total civilian death toll at over 70,000. 

CNN’s Wolf Blitzer on the Saudi slaughter in Yemen.
How is this guy still on the air?! pic.twitter.com/f6Z9Q9gYCY

— IN THE NOW (@IntheNow_tweet) April 27, 2018

And here’s the full CNN interview segment: 

Wolf Blitzer’s first thought was those poor defense contractors and the “need” for the Pentagon to expand its budget:

“…Because you know, there’s a lot of jobs at stake. Certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia, there’s going to be a significant loss of jobs, of revenue here in the United States.”

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An American doctor exposed to Ebola while working in the Democratic Republic of Congo (DRC) was placed into quarantine in as secure area at the University of Nebraska, officials said. 

The physician, who is not exhibiting symptoms of Ebola, was transported by private plane and a car, and will remain under observation for up to two weeks at the University of Nebraska Medical Center (UNMC) in Omaha, according to a statement by the hospital. If symptoms appear, the doctor whose name is currently being withheld, will be transported to a specialized bio-containment unit. 

“This person may have been exposed to the virus but is not ill and is not contagious,” said UNMC infectious diseases specialist Ted Cieslak. “Should any symptoms develop, the Nebraska Medicine/UNMC team is among the most qualified in the world to deal with them.”

Nebraska Medicine, a network of hospitals, clinics and healthcare colleges, together with academic partner UNMC, are among world leaders in the treatment of Ebola, which spreads through contact with bodily fluids and causes hemorrhagic fever with severe vomiting, diarrhea and bleeding. –CNBC

The current Ebola outbreak in the DRC is the second worst in recorded history, killing 356 of 585 people who have contracted it since it began to spread six months ago, according to the World Health Organization. 

Nebraska Medicine handled three patients with Ebola in 2014 and monitored several more for exposure during a 2013 – 2016 West African outbreak that was the worst on record, which tallied over 28,000 confirmed cases – killing more than 11,000. 

In 2014 a Harlem doctor set off a panic in New York City when he returned from Guinea infected with the virus and then rode the subway before going bowling in Williamsburg. He was hospitalized and released several weeks later with a clean bill of health. 

Ebola has an incubation period of up to three weeks before symptoms emerge. 

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White House Chief of Staff John Kelly will be leaving the Trump administration on Wednesday after 18 months on the job wrangling President Trump and keeping the West Wing in order. 

In an exclusive two-hour interview with the LA Times, Kelly offers a peek behind the curtain as he presided over some of the Trump administration’s most controversial immigration and geopolitical policies. 

“When I first took over, he was inclined to want to withdraw from Afghanistan,” Kelly recalled. “He was frustrated. It was a huge decision to make … and frankly there was no system at all for a lot of reasons — palace intrigue and the rest of it — when I got there.”

Trump, who campaigned on non-interventionism and reducing troop counts wherever possible, announced the pullout of all US troops from Syria, and half of the 14,000 troops in Afghanistan – after Kelly’s departure was confirmed December 8 – moves that Kelly opposed as Chief of Staff.

Kelly’s supporters, meanwhile, have suggested that he was the only thing stopping Trump from making several ill-advised choices, such as not pulling US forces out of South Korea, and not withdrawing from NATO as Trump has threatened. 

That said, the outgoing Chief of Staff maintains that President Trump had access to multiple streams of detailed information before major decisions were made – despite Trump’s reputation for relying on his gut instinct. 

“It’s never been: The president just wants to make a decision based on no knowledge and ignorance,” said Kelly. “You may not like his decision, but at least he was fully informed on the impact.”

Bone crushing

Kelly tells the Times that it was a “bone-crushing hard job” to have spent nearly every waking minute of 15-hour days with the President, “but you do it,” he added. 

On most days, he said, he woke up at 4 a.m. and typically came home at 9 p.m. Then he often went straight into a secure area for classified reports and communications so he could keep working.

“I’m guarded by the Secret Service. I can’t even go get a beer,” he quipped. –LA Times

Kelly also noted that while Trump pushed back on his advisors to test the limits of his authority under the law – often asking Kelly “Why can’t we do it this way?” – that Trump never ordered him to do anything illegal “because we wouldn’t have.”

“If he had said to me, ‘Do it, or you’re fired,” Kelly said, he would have resigned. 

According to Kelly, Trump brought him in to bring structure and order to a chaotic White House racked with inter-agency rivalry, remarkably high staff turnover and nearly constant controversy – adding that he tried to remove politics from his decision-making. 

“I told the president the last thing in my view that you need in the chief of staff is someone that looks at every issue through a political lens,” Kelly said. 

Kelly served 46 years in the Marines, from the Vietnam War to the rise of Islamic State, making him the U.S. military’s longest-serving general when he retired in January 2016.

When Trump picked him to head Homeland Security, and then serve as White House chief of staff, officials from the Pentagon to Capitol Hill expressed hope that Kelly would be one of the “adults in the room” to manage a mercurial president.

To critics, Kelly failed at that task, unable to rein in Trump’s angry tweets or bring order to executive decision-making.

Worse, they argue, he aggressively advocated and implemented harsh immigration measures, including separating migrant children from their parents on the border last summer, that quickly ran aground or were reversed in the courts. –LA Times

Kelly brushed off reports that Trump was put off by Kelly’s iron grip on White House operations or the endless briefings, however his “anticlimactic exit,” as the Times puts it, “reflects a tenure dogged from the outset by the indignities of constant speculation, fueled by the president’s own public remarks, that he would be fired.” 

Kelly said that the decision to leave was solidified after the November 6 midterm election, in which Republicans lost control of the House. Two days later, Trump announced Kelly’s departure. 

“John Kelly will be leaving, I don’t know if I can say retiring,” Trump said from the South Lawn of the White House before departing for the annual Army-Navy football game. “But he’s a great guy.”

Unlike Kelly’s friend James N. Mattis, the retired Marine general who resigned as secretary of Defense with a public letter rebuking the president for abandoning allies and undermining alliances, Kelly kept his counsel.

But his impending departure from the eye of the storm created an embarrassing void at the White House as one candidate after another publicly pulled out or declined the chief of staff job. –LA Times

The departure of Kelly has many in Washington worried that nobody will be watching Trump – mostly among Democrats. 

“Now, it just seems to be a free-for-all,” said Sen. Jack Reed (D-RI). “There’s no real consistent figure that’s going to stand there and just make sure literally the trains run on time. I think that was one of Kelly’s major contributions.”

“It’s a loss, there’s no question,” said Sen. Dianne Feinstein (D-CA). 

Kelly leaves amid a stalemate over $5 billion in funding for Trump’s US-Mexico border wall, which has resulted in a government shutdown now entering week two. Trump has blamed Democrats, who have refused to provide more than $1.3 billion for border security. 

“To be honest, it’s not a wall,” said Kelly – who embarked in early 2017 on seeking advice from those who “actually secure the border,” on what to do. Speaking with Customs and Border Protection agents – referred to by Kelly as “salt-of-the-earth, Joe-Six-Pack folks,” the outgoing Chief of Staff recounts “They said, ‘Well we need a physical barrier in certain places, we need technology across the board, and we need more people’.” 

“The president still says ‘wall’ — oftentimes frankly he’ll say ‘barrier’ or ‘fencing,’ now he’s tended toward steel slats. But we left a solid concrete wall early on in the administration, when we asked people what they needed and where they needed it.” 

When pressed by the Times over whether there is a security crisis at the Southern border, or if Trump has simply stirred up fears of a migrant “invasion,” Kelly said “We do have an immigrant problem.” 

From the 1980s to the mid-2000s, apprehensions at the border — the most common measure of illegal immigration — routinely reached more than 1 million migrants a year.

Today, they are near historical lows. In the fiscal year that ended in September, border authorities apprehended 521,090 people.

But immigration officials are seeing a dramatic rise in families and unaccompanied minors at the border, mostly from Central America.

Kelly saw the corruption and violence that spurred migrations from El Salvador, Honduras and Guatemala, first as head of the Pentagon’s Southern Command, which stretches from South America to Mexico’s southern border, then at Homeland Security.

He says that experience has given him a nuanced view on immigration and border security — one that at times appears at odds with Trump’s harsh anti-immigration messaging and policy.

“Illegal immigrants, overwhelmingly, are not bad people,” Kelly said, describing many migrants as victims misled by traffickers. “I have nothing but compassion for them, the young kids.” –LA Times

Kelly laid blame on immigrants and lawmakers, and not the Trump administration, for the tense situation at the border in which thousands of Central Americans remain stranded at the southern US border waiting for asylum claims to be processed at a snail’s pace of less than 100 per day.  

“One of the reasons why it’s so difficult to keep people from coming — obviously it’d be preferable for them to stay in their own homeland but it’s difficult to do sometimes, where they live — is a crazy, oftentimes conflicting series of loopholes in the law in the United States that makes it extremely hard to turn people around and send them home,” said Kelly. “If we don’t fix the laws, then they will keep coming,” he continued. “They have known, and they do know, that if they can get here, they can, generally speaking, stay.”

Kelly’s advice to stop illegal immigration”? “stop U.S. demand for drugs, and expand economic opportunity” in Central America, he said. 

Kelly dinged the Trump administration for failing to appropriately predict the public outrage stemming from Steve Bannon’s “travel ban” in January 2017, as well as the “zero tolerance” immigration policy and resultant spike in family separations this year. 

Shortly after taking office, Trump issued an executive order immediately suspending the entire U.S. refugee program for 120 days, indefinitely freezing the entry of refugees from Syria and barring travelers from seven Muslim-majority countries.

Refugees already approved for resettlement, green card holders and others were turned away from flights, detained, and in some cases deported. Federal judges issued emergency stays, and several iterations of the travel ban have been challenged in court.

At the time, despite reports he’d been caught off-guard by the president’s order, Kelly gave a full-throated defense.

“I had very little opportunity to look at them,” before the orders were announced, Kelly acknowledged in the Times interview. “Obviously, it brought down a greater deal of thunder on the president.”

Blain Rethmeier, who helped shepherd Kelly and his replacement at Homeland Security, Kirstjen Nielsen, through their Senate confirmations, put it more colorfully: “He got handed a [crap] sandwich the first week on the job.” –LA Times

“There’s only so many things a chief of staff can do, particularly with a personality like Donald Trump,” said former Kelly colleague David Lapan of the Bipartisan Policy Center. 

In May, then-Attorney General Jeff Sessions announced a zero-tolerance immigration policy which resulted in the high-profile separation of migrant children from their parents – a practice conducted under the Obama Administration (which the ACLU even sued them over). Kelly said Sessions’ announcement surprised the White House. 

“What happened was Jeff Sessions, he was the one that instituted the zero-tolerance process on the border that resulted in both people being detained and the family separation,” said Kelly. “He surprised us.” 

The task of implementing the policy fell on the shoulders of Kelly’s replacement at the Department of Homeland Security, Kristjen Nielsen, who came under fire for claiming that there was no official policy of separating families.

“She is a good soldier; she took the face shot,” said an anonymous Senior White House official to the Times. “No one asked her to do it, but by the time we could put together a better strategy, she’d already owned it.”

When asked why he stuck it out for 18 months in the chaotic Trump White House, “despite policy differences, personality clashes, the punishing schedule and a likely lasting association with some of Trump’s controversies,” Kelly said it was a matter of duty. 

“Military people,” said Kelly “don’t walk away.” 

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